Regional Security
What we are tracking
Houthi missile strikes on Riyadh’s King Khalid International Airport killed at least 14 people and wounded more than 300 over the weekend, the deadliest attacks on Saudi Arabia since the Iran war began, Bloomberg reported. The Saudi-led coalition said it intercepted further missiles and drones, including some aimed at areas home to key oil and gas facilities, and vowed a “decisive” response. Saudi officials say they are running low on interceptors and are scouring the globe for air defences, while Washington has so far sent only military advisers, the Wall Street Journal reported. Riyadh’s financial district shifted to remote work, and the chief executives of BP and Shell withdrew from the WPC Energy Congress, where Energy Minister Prince Abdulaziz bin Salman insisted that “Vision 2030 must continue.” Iran, meanwhile, is preparing for a return to direct fighting. It has built dirt mounds around its Pickaxe Mountain and Natanz nuclear sites to impede ground raids, rebuilt missile and drone facilities, and is rallying its public for war, the Journal reported. On October 11, Mohsen Rezaei, secretary of Iran’s Supreme National Security Council, said Tehran could target the UAE, which has largely escaped attack since late spring, along with data centres and internet cables across the region. Iranian officials have also warned that renewed conflict could bring strikes on Saudi oil facilities. A third U.S. aircraft carrier strike group is heading to the region, and at least three commercial vessels were hit in and around Hormuz over the weekend.
Why it matters
Saudi Arabia now faces pressure on two fronts: a Houthi campaign hitting the tourism, events and investment behind the crown prince’s economic plan, and an Iranian threat that could extend to Saudi oil and UAE infrastructure. The Finance Ministry already expects the economy to contract 3.6 percent this year, and the Future Investment Initiative on October 26 is the next test of investor confidence. For the UAE, being named as a target marks a significant shift.
What to watch
Whether the U.S. joins strikes on the Houthis or resumes strikes on Iran after the November 3 midterms, whether the Future Investment Initiative goes ahead on October 26 with senior international attendance; and whether Iran acts on its threats against the UAE and regional data infrastructure.
Aviation Security
What we are tracking
The Houthis have declared Saudi airspace “a theater of operations for our missile forces,” and their attacks are disrupting one of only two remaining primary air corridors between Europe and Asia, the Wall Street Journal reported. The Houthi barrage on Saudi Arabia since last month has destroyed a parked Airbus A320, damaged at least five other aircraft and killed several airline workers, including a captain at flag carrier Saudia. King Khalid International Airport will remain closed until October 17, Reuters reported, and cancellations across all Saudi airports reached 46.4 percent, according to Cirium. Lufthansa has cancelled Riyadh flights until October 16, Air France-KLM has suspended them until the end of the month, and Etihad and Qatar Airways have halted services to Riyadh and other Saudi cities. Delta postponed its first nonstop service from Atlanta to Riyadh from October 23 to March. Regulators have tightened their guidance. The EU Aviation Safety Agency widened its warning on Saudi airspace, the FAA advised U.S. carriers to exercise caution, and France, Canada and Germany warned airlines about flying over all or large parts of the kingdom. OpsGroup now advises airlines to avoid Saudi airspace entirely.
Why it matters
Civil aviation has become a deliberate target rather than collateral damage. “This level of sustained intense attack on civil aviation is unprecedented,” said OpsGroup founder Mark Zee. The risk extends well beyond Saudi Arabia. Avoiding the southern corridor “closes off options for getting into Dubai, Abu Dhabi for most western carriers,” Zee told Reuters, a direct challenge to the Gulf’s position as a global aviation hub. It also follows the attempted hijacking of a FlyDubai flight by one of its pilots earlier this month, and comes with jet fuel trading at about twice last year’s price.
What to watch
Whether King Khalid reopens as scheduled on October 17, whether airlines extend suspensions to other Gulf routes as the southern corridor narrows, and whether governments move toward coordinated restrictions on contested airspace.
Sanctions and Illicit Finance
What we are tracking
An internal Binance report reveals how a network run by Babak Zanjani, a longtime financier for Iran’s regime, used the crypto exchange to move money for the Islamic Revolutionary Guard Corps, the Wall Street Journal reported in an exclusive. The 80-page document, prepared in April at the request of the UAE’s financial intelligence unit, details 21 trading accounts linked to Zanjani’s network, including companies operating openly in Turkey and the UAE. The network made $850 million in total transactions on Binance, and at least $67 million flowed from two accounts to wallets connected to the IRGC. The first member of the network that Binance’s investigators identified was a “high-value customer,” a Tajik associate of Zanjani officially employed by a Dubai-based diamond vendor run by Zanjani’s sister, whose account received more than $10 million from IRGC-linked wallets. The account of a UAE subsidiary of Zanjani’s crypto firm, Zedcex, was accessed from Tehran more than a dozen times. Binance said it blocked the customer’s accounts in late 2025 and removed the last of them in May, adding that equating trading volume with funds reaching the IRGC is “materially misleading.” A UAE official said safeguarding the integrity of the country’s financial system is “a national priority.”
Why it matters
The case shows how Iranian sanctions evasion has moved into crypto through intermediaries in the Gulf and Turkey. It also shows how far the UAE has shifted. Long considered a haven for Iranian businesses, it has been cracking down on financial links with Tehran since absorbing Iranian missile and drone attacks, and the Binance report was itself produced for UAE authorities. For a country that requires crypto firms to meet global compliance standards, the episode tests how those rules are enforced.
What to watch
Whether U.S. or UAE authorities take further action against firms linked to the Zanjani network, and whether the UAE tightens oversight of crypto service providers.
Energy and Infrastructure
What we are tracking
Brent crude rose 1.8 percent to settle at $106.65 a barrel on October 12 as Saudi Arabia faced fresh attacks and Ukraine cast doubt on an “energy ceasefire” announced by President Trump, Bloomberg reported. Prices remain more than 70 percent higher this year. Crude shipments through Hormuz have recently approached pre-war levels, but far fewer refined products are passing through the strait, squeezing diesel supplies worldwide. Oxford Economics now expects Brent to average above $100 a barrel through the second quarter of 2027. The short-lived U.S.-Iran peace pact in June did leave a mark on trade. U.S. imports of fuel from Kuwait reached nearly $680 million in August, up from zero in July, and Saudi sales rose to more than $600 million from $70 million, according to Census Bureau data cited by AGBI. Saudi Arabia’s East-West pipeline hit a record 5.8 million barrels a day this month. The threat is also widening to digital infrastructure. Analysts told AGBI that Saudi data centre operators should review contingency plans and consider stronger physical protection as the conflict exposes vulnerabilities in critical infrastructure. The kingdom had more than 60 data centres and 467 megawatts of capacity in early 2026, up from 68 megawatts in 2021, and S&P Global Ratings estimates that hardening sites could raise costs by 5 to 7 percent.
Why it matters
Gulf producers have kept crude moving through bypass routes and shuttle transfers, but markets are pricing a more persistent risk premium, and non-oil exports such as fertilizer and aluminum are lagging. Iran’s threat to U.S.-linked data centres in the UAE, after earlier Iranian strikes left AWS unable to restore some services hosted in Bahrain and the UAE, puts the region’s AI buildout in the line of fire.
What to watch
Whether Brent holds above $100 as attacks on Saudi Arabia continue; whether refined product flows through Hormuz recover; and whether developers build physical hardening into new Gulf data centre projects.
Capital and Investment
What we are tracking
The UAE economy contracted in the second quarter as the war disrupted travel, tourism, transport and trade, AGBI reported. Real GDP fell a little more than 2 percent year on year to AED477 billion ($130 billion), with non-oil activities down 1.1 percent, according to preliminary federal estimates. The economy still grew 0.4 percent in the first half. Startup funding is holding up but shifting. MENA startups raised $3 billion in the first nine months of the year, 7 percent less than a year earlier, according to Magnitt. Rounds above $100 million took more than half of all capital, while funding outside those deals fell 32 percent. Foreign investors’ share fell to 42 percent from 50 percent, and regional investors supplied 58 percent of capital. “The region did not stop being funded; it started being funded from inside,” said Soumaya Ben Beya Dridje of Rasmal Ventures. Gulf sovereign capital is also looking outward. Mubadala, the $385 billion Abu Dhabi fund, plans to increase investment in China, India, Japan and South Korea, Semafor reported, with chief financial officer Carlos Obeid saying it plans to deploy about 10 percent of its assets globally each year. Hedge fund executives at a Bloomberg forum said Dubai remains a compelling base despite the conflict.
Why it matters
The war is weighing on the UAE’s non-oil economy, but it has not broken the region’s financial pull. Capital is becoming more selective and more local, with regional investors filling the gap left by Western funds and backing companies with real revenue and a clear use of AI. Mubadala’s Asia push, including last month’s stake in Luckin Coffee, shows Gulf funds also using global deals to bring new brands and partners into the domestic economy.
What to watch
Whether third-quarter data show a recovery in non-oil activity, whether Western investors return to leading early-stage rounds, and whether Mubadala’s Asian investments bring new partners into the UAE.
Related articles
- Saudi Arabia Fends Off More Attacks After Fatal Weekend Strikes (Bloomberg)
- Iran-Backed Militants Are Tightening the Screws on Saudi Arabia’s Crown Prince (Wall Street Journal)
- MBS’s Economic Ambitions for Saudi Arabia Collide With Yemen War (Bloomberg)
- Saudi Minister Says Riyadh Is Safe, Despite Deadly Airport Attacks AGBI)
- Iran Is Fortifying Nuclear Sites and Rallying Its People for a Return to Fighting (Wall Street Journal)
- Air Travel Emerges as Dangerous Front Line in Global Conflicts (Wall Street Journal)
- Houthis Bombard Saudi Air Links in Effort to Cut Kingdom Off From Rest of World (Wall Street Journal)
- Saudi Capital’s Airport to Remain Shut This Week as Airlines Cancel Services (Reuters)
- Delta Delays Plans for Nonstop Service to Saudi Arabia (Wall Street Journal)
- How a Binance ‘High-Value Customer’ Established a Financial Lifeline for Iran (Wall Street Journal)
- Fragile Peace Pact Drove Brief Spike in Gulf Fuel Exports to US (AGBI)
- Saudi Data Centres Face Rising Security Risks (AGBI)
- UAE Economy Slows as War Hits Business Activity (AGBI)
- War and AI Make Mena Venture Capital Harder to Secure (AGBI)
- Mubadala Doubles Down on Asia Investments (Semafor)
